49
Remuneration Report (continued)
Summary overview of remuneration elements
Labour market peer group
Report of the
Report of the
Financial
Sustainability
Other
Introduction
Executive Board
Supervisory Board
Statements
Review
Information
Heineken N.V. Annual Report 2017
The Executive Board remuneration policy is simple and transparent in design, and consists of the following key elements:
Remuneration element
Description
Strategic role
Base salary
Involves fixed cash compensation
Aims for the median of the labour market peer group
Facilitates attraction and is the basis for
competitive pay
Rewards performance of day-to-day activities
Short-term variable pay
Is based on achievements of annual measures,
of which aweighted 75% relate to financial and
operational measures for Heineken N.V. and 25%
to individual leadership measures
Aims, attarget level, forthe median of the labour
market peer group
Is partly paid in cash, and partly in investment shares
with a holding period of five calendar years:
- the part paid in shares is between 25% and 50%
of the full gross pay, depending on the individual's
choice whether, and to which extent, to exceed
the mandatory 25% share investment
- the part in cash is paid net of taxes (i.e. after
deduction of withholding tax due on the full
before-tax pay)
Investment shares are matched on a 1:1 basis after
the holding period
Drives and rewards annual HEINEKEN performance
Drives and rewards sound business decisions forthe
long-term health of HEINEKEN
Aligns Executive Board and shareholder interests
Long-term variable award
Is based on achievements of three-year financial
targets for Heineken N.V. as specified on page 54
Drives and rewards sound business decisions forthe
long-term health of HEINEKEN
Aims, attarget level, forthe median of the labour
market peer group
Is awarded through the vesting of shares, net of taxes
(i.e. after deduction of withholding tax due on the full
before-tax award)
Aligns Executive Board and shareholder interests
Supports Executive Board retention
Vested shares are blocked for another two years, to
arrive at afive-year holding restriction after the date
of the conditional performance grant
Pensions
Defined Contribution Pension Plan and/or Capital
Creation Plan
Provides for employee welfare and retirement needs
A global labour market peer group was adopted bytheAGM in 2011, and subsequently adjusted in 2012 and 2017. The median target
remuneration of this peer group is a reference point forthe target remuneration of the CEO and CFO. Each year, the Remuneration Committee
validates the peer group to ensure relevance, and recommends adjustments to the Supervisory Board if needed. For 2017, the peer group consisted
of thefollowing companies:
Anheuser-Busch InBev (BE) Diageo(UK) Nestlé (CH)
Carlsberg (DK) Henkel (DE) Pepsico (US)
Coca-Cola (US) Kimberley-Clark (US) Pernod Ricard (FR)
Colgate-Palmolive (US) MondelezInternational (US) Unilever (NL)
Danone (FR)
L'Oréal (FR)